Wheat price on the world market is on the rise again due to the Russia-Ukraine war. Official Kiev was given the right to conduct hostilities in the internal territory of Russia, due to which shipping on the Black Sea was delayed. Due to logistical problems, the cost of one ton of grain rose by $3-4.
In the words of the Executive Director of the Georgian Wheat and Flour Producers Association Levan Silagava, this increase is not dramatic so far.
"Price hikes was caused by the fact that Ukraine was allowed to strike at Russia inside its territotry, that hampered ships movement across the Black Sea. As a result, the cost of logistics has increased being a prerequisite for shipping problems and price hikes.
A price rise is predictable given that Russia and Ukraine are the largest suppliers on the global market. At the moment, it is not dramatic," says Levan Silagava.
The Executive Director of the Georgian Wheat and Flour Producers Association notes that wheat price hikes are not expected in Georgia in the short term. There are several reasons for this. Grain is delivered to the country by road, and a delay at the Black Sea will not be a problem at this stage. Apart from that, the country has already bought its grain stock. Another reason is the approaching New Year. During the pre-Christmas and Christmas period, economic activity is suspended for about a month.
"A New Year's break is from December 20 to January 20. We have already brought stocks and at the moment we do not face any major challenges," says Levan Silagava.
Silagava believes that the current price hikes are not dramatic, however, if this trend continues, after the New Year wheat price may increase significantly.
"The price increase of 3-4 dollars per ton is not dramatic. The price is now looking for its equilibrium level. This process has not yet become a trend. But if it continues, it may become a trend. It is expected that pricing will take 2 weeks. But as in 2 weeks it will be mid-December, there will be a pause in economic activity and we don’t expect any major changes. Changes might be observed after the new year," Levan Silagava notes.
Before shipping on the Black Sea was delayed, the global wheat prices had fallen due to a bountiful harvest.
